MR. JOHNDROE: Good afternoon. I'd like to introduce Dan Price, the
Deputy National Security Advisor for International Economic Affairs; and
Jim Connaughton, the Chairman of the President's Council on
Environmental Quality. They're going to brief today on a couple of the
economic issues discussed here, as well as the climate and energy
security issues. And following them, Dana Perino will be here to discuss
the President's bilateral meetings with Prime Minister Howard.

Dan.

Q Ground rules?

MR. JOHNDROE: This is on the record, off-camera.

MR. PRICE: Thank you very much. Good afternoon. My name is Dan Price. I
want to cover three issues very briefly. The first is the Defense Trade
Cooperation Treaty. The second is trade as it was discussed today. And
the third is the Joint Statement on Energy Security and Climate Change.
On the third, I'll give very brief remarks, then ask Chairman
Connaughton to expand.

First, the Defense Trade Cooperation Treaty that was signed today. It
does a number of things. First it facilitates closer cooperation between
both our militaries and our defense industries so as to enhance the
interoperability of both equipment and systems. This will improve our
ability to conduct joint operations, as well as our ability to work
cooperatively on research, development and production.

Under the implementing arrangements that are contemplated by the treaty,
our industries will move from the licensing regime under the U.S.
International Traffic in Arms regulations, to the more streamlined
procedures that will be set forth in these implementing arrangements. A
similar treaty was signed by President Bush and U.K. Prime Minister
Blair in June of this year. The bottom line of this treaty: better
cooperation between our militaries and opportunities for our defense
industries to work more closely together.

Trade: The President took note of the bilateral free trade agreement
between the United States and Australia, noting that it has resulted in
an increase of trade by approximately 19 percent. Prime Minister Howard
and President Bush also discussed the Doha Round and the importance of a
successful and ambitious conclusion to that round, and shared ideas on
what would be necessary to bring it to a successful conclusion.

Ambassador Schwab has been meeting with trade ministers today, and
you'll likely hear a report or an update from her tomorrow on the
progress of her consultations. I think it is safe to say that Doha will
remain the trade issue that is front and center for the President in his
discussions at APEC.

There was also discussion between Prime Minister Howard and the
President on further regional integration, both on the economic side,
looking towards the vision of the free trade area of the Asia Pacific
and on the human security side.

Finally, the last point I wanted to cover was the Joint Statement on
Climate Change and Energy by Prime Minister Howard and President Bush.
There are a number of significant features in the statement that
Chairman Connaughton will address. For the moment, I'd simply like to
say what this statement shows is the common approach of the United
States and Australia, and the intent to address the problems of climate
change and energy security comprehensively and in an integrated fashion.

Thank you very much. I'd like to turn it over to Jim Connaughton,
please.

CHAIRMAN CONNAUGHTON: Thanks, Dan. What I wanted to do is just give you
a sense of the main features of the bilateral statement today. First let
me put things in context. The issue of climate change is a long-term
challenge that goes hand-in-hand with our efforts to address energy
security, and all of this is about providing clean energy that helps
lift people out of poverty and keeps powering the major economies, as
well. So when Dan talked about doing this in an integrated way, this is
a statement that brings those themes together.

The climate challenge -- the big areas of the climate challenge are --
break into four categories. One is the efficiency of our energy use and
the renewability of it. The second biggest issue is energy production.
The third is transportation. And the fourth is forestry. In each of
these major areas where we need to make significant progress, the
statement focuses on new areas for cooperation.

We already have substantial work underway between Australia and the
United States on the issue of efficiency and on the issue of renewable
energy, and we've done partnerships on hydrogen. So those are well
underway, and the statement reflects that. So what I'd like to do is
highlight some of the new features in our bilateral arrangement, and
also how we'll work together in the multilateral fora.

So first, you heard a little bit from the President today, so I'll give
you a little more, on the idea of the zero emission power generation
equation. The President emphasized, along with Prime Minister Howard,
the importance of civilian nuclear energy as a key contributor to
dramatically reducing greenhouse gases and air pollution, and provide
base-load energy, especially for urban areas.

In the remarks today emphasis was placed on Gen IV, which is the next
generation of civilian nuclear energy that is even safer, more
proliferation resistant, and more efficient than the current generation
of nuclear plants. And we're pleased that Australia has expressed this
interest in participating in this long-term effort to produce the next
best generation of nuclear energy.

But equally important is the invitation that just went out to Australia
to join the conversations on the Global Nuclear Energy Partnership. If
Gen IV is about the next generation of nuclear power, the Global Nuclear
Energy Partnership is about how to create a consortium of responsible
nations to deal with what's called the fuel cycle -- to deal with the
production of civilian nuclear fuel and to deal with the fuel after it's
used, to reprocess it and recycle it. There's a lot of issues that we
can work on collectively among the countries that are able to use
nuclear, and the fact Australia is now joining as a major supplier of
the fuel is very important.

The other piece of the near-zero emission power equation is coal.
Australia is a major coal producer, as well as providing uranium for
nuclear power plants around the world. Australia has now indicated its
interest in joining the Future Gen partnership, which is an
international partnership that the United States created a couple of
years ago, which will dedicate more than $1 billion to building the
world's first near-zero emission coal-fired power plant that produces
both electricity and hydrogen, which is a zero-emission fuel.

The fact that Australia is joining and committing government resources
to this is a very important development. They will now be joining with
China as part of the partnership, India, and a number of other countries
that are going to help achieve this breakthrough in near-zero emission
power generation.

I would also like to emphasize the fact that we are now well underway
with the Asia Pacific Partnership on Clean Development and Climate,
which Prime Minister Howard launched here in Sydney a year and a half
ago. In that short amount of time we have now launched more than 100
work programs in the areas of clean fossil energy, aluminum, coal
mining, renewable energy power generation, cement buildings and
appliances, and steel. Those are outlined in the statement. This is a
major step forward working with the private sector, and this is the
first sort of big-scale public-private international partnership that's
underway.

I'll highlight deforestation. Australia has come forward with some very
innovative proposals to address deforestation. These coincide very much
with the President's own initiative against illegal logging, and we look
forward to future conversations on the U.N. Framework Convention on
Climate Change and other fora on forestry.

Finally, we have agreed that we're going to work together on a new
proposal under the Montreal Protocol -- this is the international treaty
that deals with ozone depleting substances. Well, as it happens, there
are some ozone depleting substances that also contribute substantially
to climate change. The U.S. is pushing a very aggressive proposal at
upcoming meetings in just a few weeks actually to accelerate the
phase-out of some of these very potent substances. And we're pleased
that Australia is going to join us in this effort. It's actually a huge
chunk of near-term emission reductions that we can achieve under this
international treaty that we've been working on together since the late
1980s.

So I'll end there.

Q The President said today, "As I'll say in the speech here Friday,
we'll show flexibility when it comes to making sure this round -- this
Doha Round -- is as successful as possible." Is the President going to
lay out new proposals for restarting Doha?

MR. PRICE: I don't want to predict what the President will say. I will
say this. The President stated today that the United States has the
requisite flexibility to bring this round to a successful conclusion.
But the United States cannot do this alone. A successful round will
require flexibility being shown by both other developed, as well as
particularly the advanced developing countries. I think I'll stop there.

Q Can you say what the ideas that they share were? You said the Prime
Minister and President shared ideas on Doha. Can you get specific at all
on that?

MR. PRICE: I can try to be a little more specific. They identified the
areas that ministers will need to address when negotiations resume in
Geneva, principally in the areas of industrial tariffs, and market
access for both agricultural and industrial goods, as well as addressing
agricultural subsidies. And I think it's fair to say they had a
conversation concerning what countries should be doing and what
countries they should be talking to, to ensure that all countries make a
contribution to bring this round to a successful conclusion.

Q Can you just explain anything on the FTAAP program at the moment, the
Free Trade Area of the Pacific concept? And is that being pushed hard in
meetings? What can we expect in terms of any announcements on that?

MR. PRICE: Well, there is a report to leaders that's being prepared --
that's being delivered on FTAAP, and it provides a lot of food for
thought. As you know, FTAAP, is a long-term vision of a free trade area.
There's been a number of steps taken towards realizing that vision,
including the preparation of so-called model measures that go into FTA
chapters. This is being done really for two reasons -- one, there's a
lot of FTAs within the region now. The exercise of preparing model
measures and model chapters is aimed at the twofold goal of, one,
helping to harmonize the FTAs that are being negotiated, but also to
carry forward work on what a region-wide FTA might look like.

Q The President said at the news conference that it would be helpful if
China floated its currency. And I'm wondering if he's going to raise
that specific issue in his bilateral talks with Hu.

MR. PRICE: As you know, the President has appointed our Secretary of
Treasury, through the process of this strategic economic dialogue, as
the kind of principal channel of engagement with China on such issues.
That said, a whole range of economic issues, bilateral issues with China
are obviously on the table, and would naturally be subjects of
discussion between the two Presidents -- trade would be one. It would
not surprise me at all if exchange rates were discussed. I'd really not
like to get into any more detail on what the course of that discussion
may be. But it is a very important issue between the countries. The
entire economic relationship is an important and a complex one, as the
President said, so I'm sure its contours will be explored.

Q Didn't the President already ask for that? He did at one of the last
meetings with Hu, didn't he -- about currency?

MR. PRICE: I'm sorry, what was the question?

Q Didn't the President already suggest to President Hu at one of their
earlier meetings that something needed to get done on the Chinese
currency?

MR. PRICE: That may well be. This is not a new topic of discussion
between the countries, among the ministers or between the Presidents.

Q Can I ask how much progress you're making in getting the major
emerging economies to go along with the idea of international goals for
greenhouse gas emissions?

CHAIRMAN CONNAUGHTON: We have received very strong and positive interest
in attendance by the 13 invited major economies to the meetings that
will start in Washington on September 27th and 28th. At the top of the
agenda is work toward achieving consensus on a long-term global goal for
reducing emissions. We have received some proposals on what that goal
may be. We've received a lot of questions about some of those proposals.
And we anticipate a full and robust discussion starting on the 27th and
28th, and I think it will take some time beyond that.

So it's on the agenda, there's support for it being on the agenda, and
there's a lot of now -- a lot of conversation going on among the
countries as to what the underlying basis for such a goal might be. And
I see that as all very positive. So we'll really be kicking off the
multilateral discussion of that in earnest in just a couple of weeks.

Q I thought there were going to be 15 -- you mentioned 13 I think just
now.

CHAIRMAN CONNAUGHTON: Yes, 12 countries and the EU. So it's how you look
at the EU -- that may be your question. I think we had been saying up to
15 as a notional, and then we narrowed the list to that group of 13.

Q Can you say who dropped off? Was there anybody in particular --

CHAIRMAN CONNAUGHTON: No, it wasn't -- at the time that we outlined the
proposal last May, we had notionally used the phrase "up to 15," because
if you look at the cutoff as to the major economies and those countries
that had the major emissions, it fell somewhere in the 15 range. And
then as we sharpened the list, we ended up with 12 countries plus the
EU.

Q The idea was to have some heads of states and government
participating. Do you have any that will come to this meeting?

CHAIRMAN CONNAUGHTON: Actually the heads of state -- the governmental
leaders conversations were at the G8. The leaders will be getting
together at the U.N. at the invitation of Secretary General Ban Ki-moon,
and then the meetings that we're going to host will be by leaders
representatives. So, for example, I'll be the representative for
President Bush, Mr. Price will be joining, and then each of the other
leaders are expected to send someone who is a personal representative of
them for a series of working meetings.

And then we anticipate through the course of the year, the leaders will
be talking about these issues as they do now. And then, of course, we
will have the G8 next year. Among the G-8 leaders, we have APEC this
week, where the APEC leaders will be in discussions about some of these
concepts. So I think this is going to be a very busy year, not just at
the leader level, but at a senior leader's representative level, as well
as among a number of ministries that have not been actively engaged on
this issue before.

Q Can I just follow on that? I had heard that one of the things we're
seeking is an agreement among the 21 countries to set efficiency
standards for industry and that perhaps you expect to announce such an
agreement, also that China has agreed? Is that forthcoming at this
meeting?

CHAIRMAN CONNAUGHTON: APEC is going to cover that range of issues that I
discussed on efficiency and renewable power, on power generation, on
forestry, on transportation. The specific outcomes will be a practical
work program of action, cooperatively among the APEC countries within
the context of APEC. As to whether there will be some specific items,
whether it's on goals or specific work streams, there's a number of
ideas for some new initiatives under APEC. Those are all under
discussion right now. So really, there's a variety of different ideas
and it ranges from goals to specific initiatives. Stay tuned, and we'll
let the leaders tell us what that's about later this week.

Thanks.

MS. PERINO: Hi, everybody. Sorry I was late. Good to see everyone. Let
me just give you a little bit of a readout of the President's day so
far, and then I'll take a few questions and head over to the dinner. You
heard from the leaders themselves at the press conference and so I don't
-- I don't have too much to add, but let me give you just a little bit
of color on the meetings.

They met with a smaller group first thing in the morning for a little
over an hour, and then in the expanded meeting of which I attended, they
had a very positive meeting. It's very clear, as the President said,
that Australia and the United States share common values and approach
the world in a similar way.

One of the things that's interesting is -- well, it's not -- the
President mentioned, and I don't think he mentioned this in the press
conference, is he opened up the meeting talking about how today we're in
a struggle against violent extremism, against al Qaeda, and that the
United States and Australia first forged such a strong alliance in
fighting other forms of -- in other struggles in the fight against
Fascism and Nazism and Communism. But they spent the majority of time
talking about foreign policy, certainly Iraq and Afghanistan, as well as
Iran and Middle East peace. And they spoke about trade.

There will be more on trade in the meetings to come later this week. And
of course, then, on climate change, and you've heard from Jim
Connaughton on that.

The President then took a boat over to lunch with the troops. He rode up
top of the boat with Prime Minister Howard, his wife, Janette, and
Secretary Rice. And got a tour of the city. He said it was beautiful and
a remarkable city.

Then we had lunch with the troops. He said he was very proud to be with
them, they're very courageous. And one of the things I overheard him say
to some of the troops I was sitting with is that our military is very
proud to serve along with them and they have a great working
relationship. And as they work to train the Iraqi security forces and
also beat back al Qaeda, that we have a mutually beneficial relationship
in that regard.

Then he had a -- he was treated to a great performance by a country
music singer here. I'll get you their name. Her first name was Felicity,
I can't remember the last name. And now he has a little bit of down time
before he'll have dinner with the Prime Minister tonight.

And with that, I'll take any questions, if you have any.

Q -- is he going biking?

MS. PERINO: He's on an OTR right now. As soon as he arrives, I can let
you know.

Yes, Peter.

Q A question about a domestic issue. After Senator Craig announced that
he had this intention to resign and the White House issued the statement
saying that that was the right decision for himself and his family and
his constituents, now we're getting word that he's reconsidering. What
do you think?

MS. PERINO: Obviously we are -- I don't know if we're a million miles
away, but we're many thousand miles away and certainly many hours away.
I saw that report that his spokesperson said that. I don't think that
our views have changed but, of course, this is the Senator's decision
and the Senator's seat, and I'll refer you back to his spokesperson for
any additional comments that they want to make.

Karen.

Q The President made reference to telling the American people further
about his plans on Iraq. And I'm just wondering, are there plans for a
formal speech? Are there any more details?

MS. PERINO: We'll get you more on that as soon as we are able to. Those
plans are still finalizing. And so possibly by later this week, I could
give you more on that. It will be after the testimony, of course.

Q Prime Minister Howard, really wanted to talk about Iran. Can you give
us any specifics as to what they talked about?

MS. PERINO: Let me just tell you in general, it was a discussion about
how the international community strongly believes that Iran must comply
with the obligations that it has. And stopping Iran from attaining a
nuclear weapon is a priority for the United States, the P5-plus one, and
Australia. So beyond that, I think I'll let the leaders have that
private discussion.

Q Did they talk about North Korea at all?

MS. PERINO: Not in my meeting -- I'm sorry, it wasn't my meeting. Not in
the expanded meeting, but I don't know about the private meeting.
Obviously that's going to be something that, throughout the meetings the
rest of the week, they'll be able to talk about. And remember that the
Prime Minister and the President have dinner planned for tonight.
Ambassador Chris Hill was in attendance at the expanded meeting, and the
President got an update from him on his discussions this morning before
going to the meetings.